Number of U.S. restaurants declines

NEW YORK, Aug. 21 (UPI) -- The number of restaurants operating in the United States has fallen for the first time in a decade as cash-starved diners stay home in droves, a report says.

The report by New York research firm NPD Group indicated the number of U.S. restaurants declined 5,202 to 579,416 during the 12-month span ending in March, the Chicago Tribune reported.

"This is the weakest that the restaurant business has been," said Bonnie Riggs, NPD Group's restaurant industry analyst.

Almost all the closings were among independently owned businesses, with just 111 at locations of restaurant chains, which can negotiate lower prices for food and labor.

A boost in restaurant business earlier this year came too late for many to hold on financially, the report found. NPD counts the number of restaurants operating in the nation in March and September but does not look separately at the number that closed or opened

California accounted for nearly a third of the overall decrease, with the number of restaurants down 1,500 from a year earlier, NPD found. Full-service restaurants with staff waiting tables suffered the biggest hit.

"Most restaurateurs are just living on the edge," said Jot Condie, the California Restaurant Association president.

Continued unemployment and increasing food prices threaten an industry recovery, Condie said.

Matt DeMasi, the co-owner of the 20-year-old Zach's Cafe in Studio City, Calif., said the restaurant could last maybe another 18 months of difficult times before it would have to close.

DeMasi says he's relying on personal savings to stay in business.

"We're in survival mode, have been for a while," he said.